(b) EXCEEDING DAMAGE NOTIFICATION THRESHOLD: all insurance proceeds of any
 property, damage or loss to the Aircraft, any Engine or any Part occurring
 during the Lease Period not constituting a Total Loss and in excess of the
 Damage Notification Threshold for repairs or replacement property upon
 Lessor being satisfied that the repairs or replacements have been effected
 in accordance with this Agreement. Any balance remaining shall be paid to
 Lessee;

(c) BELOW DAMAGE NOTIFICATION THRESHOLD: insurance proceeds in amounts below
 the Damage Notification Threshold may be paid by the insurer directly to
 Lessee;

(d) DEFAULT: notwithstanding the foregoing paragraphs, if at the time of the
 payment of any such insurance proceeds a Default has occurred and is
 continuing, all such proceeds will be paid to or retained by Lessor to be
 applied toward payment of any amounts which may be or become payable by
 Lessee in such order as Lessor may elect, and any remainder after cure of
 such Default shall be paid to Lessee.

In the event of a conflict between the provisions hereof and the provisions of
AVN 67B or its equivalent, the latter shall control and the provisions hereof
shall be deemed modified accordingly; provided that the provisions of AVN 67B
shall continue to reflect industry practice. To the extent that insurance
proceeds are paid to Lessee, Lessee agrees to comply with the foregoing
provisions and apply or pay over such proceeds as so required.

 143


 SCHEDULE 5

 ACKNOWLEDGEMENTS IN CONNECTION WITH FINANCING

 PART 1

 NOTICE OF ASSIGNMENT

From: Wells Fargo Bank Northwest, N.A., not in its individual capacity, but
 solely as trustee under the Trust Agreement

To: Compania Panamena de Aviacion, S.A.

 [Date]

Dear Sirs,